Sacramento Property Management

Sacramento Property Management Blog

A Helpful Landlord's Guide to Security Deposits

Alexandra Goldthwaite - Tuesday, February 22, 2022
Property Management Blog

Investing in a rental property can be a great way to generate a passive income. But like any investment, savvy landlords take precautions to protect their assets. One way to do this is through security deposits.

Every landlord needs to understand what they are and how to use them. Laws vary from state to state, so protecting your Sacramento investment starts with knowing the law in California.

Let's take a closer look at what you need to know about security deposits.

What Are Security Deposits?

The security deposit definition is money deposited with a landlord to prove you will care for their property.

In effect, a security deposit is a form of insurance for landlords. 

They provide protection in the event that the tenants violate the terms of the lease. This could be by causing damage to the property, leaving it in a dirty state, or not paying rent. Under California law, a landlord cannot charge a non-refundable deposit. 

How Much Can a Landlord Charge?

By law, there is a maximum security deposit amount that a landlord can charge. This is:

  • Unfurnished rental - 2 x the rent
  • Furnished rental - 3 x the rent

Some leases may include a clause that part of the security deposit to be used as payment for the final month's rent. 

How to Return a Security Deposit

California law states that a landlord must return a security deposit in full to the tenant within 21 days of them moving out.

This is also the period in which any deductions must be calculated. The landlord must provide the tenant with a letter to explain why the full deposit is not being returned.

This must include an itemized list of all deductions. Landlords must also provide receipts for any repairs that cost more than $126. Tenants may decide to waive their right to receive these receipts.

Sometimes, repairs take more than 21 days to carry out. In this case, a landlord must provide the tenant with a good faith estimate of the repair cost. Once the repair is complete, the landlord has 14 days to provide the tenant with receipts.

What Can the Landlord Claim For?

The expectation is that the tenant will return the rental in the same condition it was when they moved in. Naturally, a landlord must allow for reasonable wear and tear.

That means that the property must be as clean as when they moved in. If the landlord has to pay for cleaning services to restore it to this level, this can be billed to the tenant.

It's not sometimes called a damage deposit for no reason! If the tenant or their guests caused damage beyond fair wear and tear, this can be charged to the tenant.

You can also use the security deposit to recoup unpaid rent.

Security Deposits: Protection for Landlords

Security deposits are super important, and every landlord should make use of this provision. While you hope it's never needed, it's great insurance. It can help you to protect your asset.

Property management services can help you to manage this process. At Home River Group Sacramento, we can take the strain for you. We know the law, and can help you to protect your investment. 

Contact us today to learn how we can be of service to you.